Alchemy Of Trading, LLC

Looking For Anomalies 9/26/09

However, for the QQQQs there's a different story unfolding on Weekly, Cyclical Chart with DeMark Indicators 

 

Volatility Finally Awakening 9/24/09

'Round Midnight: Ear To The Tracks 9/22/2009 11:45 PM

"Two weeks ago you were very bearish. What made you change your mind?

You mean besides the Wall Street Journal article that publicized to the world that I was short 2,000 S&P contracts? The market didn't go down. The first thing I do is put my ear to the railroad tracks."

-- Paul Tudor Jones, Market Wizards

_________________________

"The market didn't go down."

There you go.

The Dollar didn't go Up either, and Volatility (VIX) crashed to a new low for the year.

Those two elements are needed by the bears -- Higher Dollar and Higher VIX.

"The first thing I do is put my ear to the railroad tracks."

Forget everything else and if you just remember that you won't get blown out....... you should also be able to make money.

This is the part that gets the public in trouble and many/most of the so-called "professionals". 

They have an opinion, a thesis, a theory -- sounds like the evil fade's in-house predictor -- and it's more important to them than price action.

There are many things in the market that defy logic here in late September including Volatility (VIX) at a new low for the year, and close to taking out the 200 Week ma, but it doesn't matter.

Maybe the whole thing will collapse tomorrow at 2:15 PM when the Fed says something totally perplexing, giving traders a rationale to sell, but right now it's obvious -- the line of least resistance is still up.

Please take a look at Charts Of Interest tomorrow, and I'll see you before Wednesday's open.

Stephen

_______

Beazer Homes 9/22/09

Excerpt From Alchemy Live! Stream 9/21/09

'Round Midnight: The Top Complaint  9/21/2009  6:00 PM

That chart below showing Weekly S&P 500 and ROC may just be an anomaly this time, unimportant, and you never get every technical facet of the markets working in the right direction.

So if someone had waited for a bell to ring when everything was absolutely perfectly in line, they'd have missed everything on the upside.

Why?

Well, I think that's mostly attributable to fear after seeing the greatest economic collapse in 70 years, the end of Bear Stearns, of Lehman Bros, of AIG as we knew it ....the government takeover of the auto industry, of many financial companies, the Fed doing what they did.......etc etc etc.....etc.

Many traders have been persistently on the wrong side, picking tops since the March low, and that continues.

Meanwhile, I hate to say that now we're waiting for the Fed on Wednesday, but I think that's partially true.

More than a few observers are speculating they'll try to bring up the issue of eventually taking away the punch bowl, but that seems early to me with unemployment at almost 10%.

So it may be choppy for the next day and a half, so don't get pulled into marginal trades.

It also appears to me that the Dollar is still key, and if it succeeds in getting much stronger, equities, precious metals, oil, etc will begin to struggle.

I'll have a full review of Charts Of Interest tomorrow, and I'll see you before Tuesday's open.

Stephen

_______

 

 

 Last Call: Yanking Them Again  9/21/2009 3:40 PM

This day has felt more random, casino-like, than the past couple weeks have been apart from a few days where that sense of the action prevailed.

And I think the program traders are yanking people around again, so you have to be careful not to get pulled into the traps that sit all over the place.

Hoping that better setups will prevail later in the week when the Fed meeting concludes, and I'm saving my ammo as much as possible because i think that will be the case.

I'll  be back to update, and good luck into the close.

Stephen

_______

3:23  That burst from Goldman's algorithm probably stopped a few shorts out, but I don't know if it was anything more than that....action is pretty dismal right now in that there is no clear trade

3:18  +1200 Tick

3:00  Final Lap

2:27  Very little movement in Market Internals -- bad breadth continues, especially on NYSE, but it seems irrelevant today. If you get short, probably lose money. Get long, probably lose. Or maybe win doing the opposite. Where's the edge? I don't see one today

2:18  120 Minute VIX got rejected at that DeMark Buy TDST. I still think

we'll get a good early warning about what stocks want to do by watching that time frame, and especially Daily and Weekly....as I am. The market should hold together on a cyclical basis as long as the Buy TDST on Daily  holds....then there is a Sell TDST on Weekly. If the latter was penetrated we're probably back to bubbleonian days in equity market

 

2:00  Final Laps

1:36  On the Zweig/Davis 4% Model, the bottom row in red shows where the switch to a Sell would occur based on last week's new closing high.....Price Moves First, Then The News Comes

 

12:50  Tomorrow is a day that many cycle analysts look at closely because it's the Autumnal Equinox, where often you see extended markets turn the other way. The next day you get the Fed announcement. So bottom-line I'm playing it very tight, although that trade this morning was somewhat aggressive.....would have been a much better idea if we were in a market where line of least resistance was down, not up  

 

 Running Out  9/21/2009 11:55 AM

Bears are running out of arguments.....and oscillators.

Gold is well over $1,000 again, and I mentioned the way the Early Cyclicals are acting today, although Homebuilders are being sold.

Meantime, the Fed upsetting the markets is always a possibility on Wednesday, but I wouldn't make a bearish bet based on that.

Hope you are faring well and see you after lunch.

Stephen

_______

11:33  QQQQs have made a Logical Trader "A Up", a good breakout from opening range, and if Breadth was positive I'd buy them....EEMs trying to do the same

11:24  Tech, Retailers, Airlines leading, the early cyclicals....it's really not a market to be short......I think we have a Fed meeting coming up, so that will be fascinating....will they prep the markets for a return to a less loose period as some are suggesting? I doubt it, not with unemployment at almost 10%

10:53  The evil fade's in-house technician is providing the usual insights. No kidding. The market is overbought. I would guess that she's been on that rant for months. There are a few things that would indicate that equities are turning down for awhile, and they all involve price action, not overbought oscillators. For example, a Sell on Zweig/Davis 4% Model 

10:41  120 Minute VIX -- There has only been one move through a DeMark Buy TDST since March, in July when there was a pullback in equities.....so an early move through here could be important

 

10:31  Airlines are bid again.....Crude under $70 may be supporting Bird notes